093_HB3518eng HB3518 Engrossed LRB093 10971 LCB 11570 b 1 AN ACT concerning tobacco. 2 Be it enacted by the People of the State of Illinois, 3 represented in the General Assembly: 4 Section 5. The Tobacco Product Manufacturers' Escrow Act 5 is amended by changing Section 15 and by adding Section 20 as 6 follows: 7 (30 ILCS 168/15) 8 Sec. 15. Requirements. 9 (a) Any tobacco product manufacturer selling cigarettes 10 to consumers within the State of Illinois (whether directly 11 or through a distributor, retailer, or similar intermediary 12 or intermediaries) after the effective date of this Act shall 13 do one of the following: 14 (1) become a participating manufacturer (as that 15 term is defined in Section II(jj) of the Master 16 Settlement Agreement) and generally perform its 17 financial obligations under the Master Settlement 18 Agreement; or 19 (2) (A) place into a qualified escrow fund by April 20 15 of the year following the year in question the 21 following amounts (as such amounts are adjusted for 22 inflation): 23 (i) For 1999: $0.0094241 per unit sold 24 after the effective date of this Act; 25 (ii) For 2000: $0.0104712 per unit sold; 26 (iii) For each of 2001 and 2002: 27 $0.0136125 per unit sold; 28 (iv) For each of 2003 through 2006: 29 $0.0167539 per unit sold; 30 (v) For each of 2007 and each year 31 thereafter: $0.0188482 per unit sold. HB3518 Engrossed -2- LRB093 10971 LCB 11570 b 1 (B) A tobacco product manufacturer that places 2 funds into escrow pursuant to subdivision (a)(2)(A) 3 shall receive the interest or other appreciation on 4 the funds as earned. The funds themselves shall be 5 released from escrow only under the following 6 circumstances: 7 (i) to pay a judgment or settlement on 8 any released claim brought against the tobacco 9 product manufacturer by the State or any 10 releasing party located or residing in the 11 State. Funds shall be released from escrow 12 under this subdivision (a)(2)(B)(i): (I) in 13 the order in which they were placed into 14 escrow; and (II) only to the extent and at the 15 time necessary to make payments required under 16 such judgment or settlement; 17 (ii) to the extent that a tobacco product 18 manufacturer establishes that the amount it was 19 required to place into escrow on account of 20 units sold in the State in a particular year 21 was greater than the Master Settlement 22 Agreement payments, as determined pursuant to 23 Section IX(i) of that Agreement, including 24 after final determination of all adjustments, 25 that such manufacturer would have been required 26 to make on account of such units soldthe27State's allocable share of the total payments28that such manufacturer would have been required29to make in that year under the Master30Settlement Agreement (as determined pursuant to31Section IX(i)(2) of the Master Settlement32Agreement, and before any of the adjustments or33offsets described in Section IX(i)(3) of that34Agreement other than the Inflation Adjustment)HB3518 Engrossed -3- LRB093 10971 LCB 11570 b 1 had it been a Participating Manufacturer, the 2 excess shall be released from escrow and revert 3 back to such tobacco product manufacturer; or 4 (iii) to the extent not released from 5 escrow under subdivisions (a)(2)(B)(i) or 6 (a)(2)(B)(ii), funds shall be released from 7 escrow and revert back to such tobacco product 8 manufacturer 25 years after the date on which 9 they were placed into escrow. 10 (C) Each tobacco product manufacturer that 11 elects to place funds into escrow pursuant to this 12 subdivision (a)(2) shall annually certify to the 13 Attorney General that it is in compliance with this 14 subdivision (a)(2). The Attorney General may bring 15 a civil action on behalf of the State of Illinois 16 against any tobacco product manufacturer that fails 17 to place into escrow the funds required under this 18 subdivision (a)(2). Any tobacco product 19 manufacturer that fails in any year to place into 20 escrow the funds required under this subdivision 21 (a)(2) shall: 22 (i) be required within 15 days to place 23 such funds into escrow as shall bring it into 24 compliance with this Section. The court, upon 25 a finding of a violation of this subdivision 26 (a)(2), may impose a civil penalty to be paid 27 into the General Revenue Fund in an amount not 28 to exceed 5% of the amount improperly withheld 29 from escrow per day of the violation and in a 30 total amount not to exceed 100% of the original 31 amount improperly withheld from escrow; 32 (ii) in the case of a knowing violation, 33 be required within 15 days to place such funds 34 into escrow as shall bring it into compliance HB3518 Engrossed -4- LRB093 10971 LCB 11570 b 1 with this Section. The court, upon a finding 2 of a knowing violation of this subdivision 3 (a)(2), may impose a civil penalty to be paid 4 into the General Revenue Fund in an amount not 5 to exceed 15% of the amount improperly withheld 6 from escrow per day of the violation and in a 7 total amount not to exceed 300% of the original 8 amount improperly withheld from escrow; and 9 (iii) in the case of a second knowing 10 violation, be prohibited from selling 11 cigarettes to consumers within the State of 12 Illinois (whether directly or through a 13 distributor, retailer, or similar intermediary) 14 for a period not to exceed 2 years. 15 (b) Each failure to make an annual deposit required 16 under this Section shall constitute a separate violation. If 17 a tobacco product manufacturer is successfully prosecuted by 18 the Attorney General for a violation of subdivision (a)(2), 19 the tobacco product manufacturer must pay, in addition to any 20 fine imposed by a court, the State's costs and attorney's 21 fees incurred in the prosecution. 22 (Source: P.A. 91-41, eff. 6-30-99.) 23 (30 ILCS 168/20 new) 24 Sec. 20. If this amendatory Act of the 93rd General 25 Assembly or any portion of the amendment to subdivision 26 (2)(B)(ii) of subsection (a) of Section 15 made by this 27 amendatory Act of the 93rd General Assembly is held by a 28 court of competent jurisdiction to be unconstitutional, then 29 such subdivision (2)(B)(ii) of subsection (a) of Section 15 30 shall be deemed to be repealed in its entirety. If 31 subdivision (2)(B)(ii) of subsection (a) of Section 15 shall 32 thereafter be held by a court of competent jurisdiction to be 33 unconstitutional, then this amendatory Act of the 93rd HB3518 Engrossed -5- LRB093 10971 LCB 11570 b 1 General Assembly shall be deemed repealed and subdivision 2 (2)(B)(ii) of subsection (a) of Section 15 shall be restored 3 as if no such amendments had been made. Neither any holding 4 of unconstitutionality nor the repeal of subdivision 5 (2)(B)(ii) of subsection (a) of Section 15 shall affect, 6 impair, or invalidate any other portion of Section 15 or the 7 application of such Section to any other person or 8 circumstance, and such remaining portions of Section 15 shall 9 at all times continue in full force and effect.